Monitor upcoming quarterly filings for actual debt paydown progress and leverage ratio improvement. The company's shift to a pure-play ASC model should improve free cash flow conversion and margin profile over time, but near-term revenue will be lower by ~$270M annually.
Price Chart
Executive Summary
Surgery Partners completed the sale of its Idaho Falls hospital facilities (Mountain View Hospital and Idaho Falls Community Hospital) to Intermountain Health for approximately $797 million in gross proceeds ($587 million net cash at closing). The company updated 2026 guidance to reflect the divestiture, now expecting revenue of $3.08B-$3.18B and Adjusted EBITDA of at least $489M, while using proceeds primarily for debt reduction, which is expected to improve leverage by ~30bps from 4.4x. This transaction transforms Surgery Partners into a pure-play short-stay surgical provider, eliminating acute-care service lines and reducing Medicaid payor mix by 50%.
Key Facts
- Closed sale of Mountain View Hospital and Idaho Falls Community Hospital to Intermountain Health on September 14, 2026
- Gross proceeds of approximately $797 million; net cash proceeds of $587 million at closing
- Transaction values combined facilities at approximately $1.15 billion, representing ~7x last-12-months Adjusted EBITDA
- Proceeds will be used primarily to pay down debt; leverage expected to improve ~30bps from 4.4x at Q2 2026
- Updated FY2026 guidance: revenue $3.08B-$3.18B, Adjusted EBITDA at least $489M (reflecting removal of Idaho Falls contribution for remainder of year)
- On a pro forma full-year basis excluding Idaho Falls: revenue $2.60B-$2.67B, Adjusted EBITDA at least $414M
- Transaction eliminates 100% of neonatology/obstetrics, inpatient pediatrics, and retail pharmacy; reduces Medicaid payor mix by 50% to under 2% of revenue
- Estimated gain on sale of $16.4 million, net of transaction costs
Financial Impact
Gross proceeds of ~$797M; net cash proceeds of ~$587M; leverage improvement of ~30bps; FY2026 revenue guidance reduced by ~$270M at midpoint vs prior $3.35B-$3.45B range
Risk Factors
- Post-closing adjustments could reduce net proceeds from the $587 million figure
- Execution risk in reinvesting proceeds or achieving targeted leverage reduction
- Potential disruption from loss of Idaho Falls facilities' revenue contribution (~$722M annual revenue removed on pro forma basis)
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001638833-26-000085 |
| Exhibit: exhibit992idfallsclosingpr.htm | 0001638833-26-000085 |
| Document: sgry-20260914.htm | 0001638833-26-000085 |
| Document: 0001638833-26-000085-index-headers.html | 0001638833-26-000085 |
| Document: 0001638833-26-000085-index.html | 0001638833-26-000085 |
| Document: 0001638833-26-000085.txt | 0001638833-26-000085 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 26, 2026 today | SC 13D/A | — | awaiting T+5 | — | — |
Oct 26, 2026 today | DEFA14A | — | awaiting T+5 | — | — |
Oct 26, 2026 today | 8-K | — | awaiting T+5 | — | — |
Oct 13, 2026 12d ago | SC 13G | $14.83 $15.40 | ▲ +3.84% | ▲ +3.39% | $23.03 (+55.29%) |
Sep 17, 2026 5w ago | 8-K | $13.35 $14.20 | ▲ +6.37% | ▲ +5.77% | $23.03 (+72.51%) |
Sep 17, 2026 5w ago | Press Release | $13.35 $14.20 | ▲ +6.37% | ▲ +5.52% | $23.03 (+72.51%) |
Aug 20, 2026 9w ago | Insider Buy | $14.52 $13.69 | ▼ −5.72% | ▼ −6.19% | $23.03 (+58.61%) |
Aug 10, 2026 11w ago | 8-K | $15.95 $14.36 | ▼ −9.97% | ▼ −9.92% | $23.03 (+44.39%) |
Aug 10, 2026 11w ago | Press Release | $15.95 $14.36 | ▼ −9.97% | ▼ −9.92% | $23.03 (+44.39%) |
Jul 24, 2026 13w ago | 8-K | $15.73 $15.90 | ▲ +1.08% | ▲ +0.71% | $23.03 (+46.41%) |
US Market Status
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